OTT application services cut mobile revenue

Published: 10 July 2018

MOBILE operators experienced a 5,8% decline in revenue to $244 677 944 in the first quarter of the year owing to the continued decrease in voice traffic as over the top (OTT) applications continue to dominate communications.

The decrease in mobile revenue was from $259 711 601 recorded in the last quarter of 2017.

Announcing the postal and telecommunications results for the first quarter of the year yesterday, Postal and Telecommunications Regulatory Authority of Zimbabwe director general Gift Machengete said that voice traffic continues to go down.

"Mobile operators revenue has gone down by 5,8% ( to $244 677 944 from $259 711 601 recorded in the last quarter of 2017). This decrease is due to mobile voice traffic which continues to go down. Used international bandwidth capacity has increased by 17% that is quite a big increase and it is because of the increased use of internet. Total fixed voice traffic has gone down by 15,5% as you are aware there is shift to data centric OTTs moving away from fixed voice traffic and that explains that decline," he said.

Potraz reported that there was an overall decline of 1% in mobile voice traffic in the first quarter of 2018.

"Net-on-net mobile voice traffic registered a 3% growth, while traffic for cross network calls amongst mobile operators recorded a big decline of about 18%. Positive traffic growth were recorded for incoming calls from internet access providers and this reflects that some telephony users mainly corporates are fast adopting the voice over internet protocol networks to make calls to mobile networks," Potraz said.

"The quarter also saw the inbound roaming traffic increase by about 10%, while outbound roaming traffic decreased by about 8%."

During the period, the internet penetration rate increased by 1,3% to 52,1% from the previous quarter despite the mobile penetration rate declining to 84,6% from 102,7% due to a cleanup of the mobile subscribers' data bases.

Machengete said this was especially true of NetOne.

Potraz reported that traffic for mobile data and internet services has been consistently increasing, and only registered a decline in the first quarter of 2018 compared to 2017.

The internet penetration rate has been increasing consistently which has resulted in mobile subscribers increasingly turning to OTT services as the preferred way of communicating due to it being cheaper over voice.

"On the other hand, total operating costs increased by 36% to record $185 888 970 in the first quarter of 2018 from $136 688 427 recorded in the last quarter of 2017. Total mobile investment increased by 70% to record $14 million in the first quarter of 2018 from $8.2 million recorded in the last quarter of 2017," Potraz said.

"Total mobile revenues were consistently increasing over the course of 2017, but declined in the first quarter of 2018. On the other hand the operating costs declined in the first three quarters of 2017 and increased